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2013 Filing Season ITIN Procedures Issued

By Sally P. Schreiber, J.D.

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Tax Section

From
the IRS

As the IRS promised when it issued the
strict new individual taxpayer identification
number (ITIN) procedures in June 2012, it issued
slightly easier procedures, effective Jan. 1,
2013, for the 2013 filing season
(FS-2012-11). While some
requirements have been eased slightly, others
have been made more stringent. The IRS stresses
that the rules will continue to evolve as it
gains experience, and it encourages comments
from interested parties.

Under the interim rules, the IRS would not
issue ITINs unless the applicants provided
original documents, such as passports or birth
certificates, or certified copies of those
documents from the issuing agencies
(IR-2012-62). Previously, ITINs
could be issued based on notarized copies of the
required documents. After June 2012, ITINs could
not be issued based on applications submitted
through certifying acceptance agents (CAAs)
unless they attached original documentation or
copies of original documents certified by the
issuing agency. In response to concerns from
practitioners, including the AICPA,
the IRS issued temporary procedures in October
2012 to be used by taxpayers who needed ITINs to
file tax returns due by Oct. 15,
2012.

Beginning in 2013, individuals who need
ITINs must still supply original documents, such
as passports or birth certificates, or certified
copies of those documents from the issuing
agencies. Acceptable identification documents
include passports, national identification
cards, visas issued by the U.S. State
Department, U.S. or foreign military
identification, U.S. or foreign driver’s
licenses, civil birth certificates, medical and
school records, and other items (a full list is
on the IRS website).

To alleviate concerns over parting with these
documents for long periods (let alone the risk of
having one’s passport misplaced by the IRS), the
new procedures involve setting up Taxpayer
Assistance Centers as well as Tax Attaché offices
in London, Paris, Beijing, and Frankfurt, and
other taxpayer sites where documents may be
reviewed.

In addition, beginning in January
2013, CAAs can once again verify the authenticity
of identification documents for ITIN applicants
and their spouses and do not need to send original
documents to the IRS. But ITIN applications for
dependents still must be submitted with original
documents. Late in January 2013, however, the IRS
promises to set up Taxpayer Assistance Centers
where dependents’ documents can be reviewed so
taxpayers do not have to part with originals.

Another of the more stringent new requirements
is that new ITINs will be effective for only five
years, after which time taxpayers have to reapply
for one.

The standards for CAAs have been
significantly strengthened by allowing only those
who are covered under the professional standards
of Circular 230—attorneys, CPAs, enrolled agents,
and registered tax return preparers—to qualify as
CAAs. CAAs are also now required to complete a
forensic document identification training course.
The CAA application and renewal processes remain
unchanged.

The IRS also announced heightened
review of documentation related to child tax
credits by requiring more information to be sure
residency requirements for these credits are met.
This is probably in response to concerns about
nonresidents successfully claiming these
credits.

These new rules, like the interim
ones, do not apply to military spouses and
dependents without a Social Security number who
need an ITIN, or nonresident aliens applying for
ITINs for the purpose of claiming tax treaty
benefits. In addition, taxpayers who filed their
2011 returns on extension and students and
exchange visitors participating in the Student and
Exchange Visitor Program are not subject to these
new rules.

The winner of The Tax Adviser’s 2014 Best Article Award is James M. Greenwell, CPA, MST, a senior tax specialist–partnerships with Phillips 66 in Bartlesville, Okla., for his article, “Partnership Capital Account Revaluations: An In-Depth Look at Sec. 704(c) Allocations.”

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